Harworth weathers the Covid crisis and pays out dividends

The Rotherham-based firm said it had an active first nine months of 2020, remaining at full operational strength throughout.

An independent valuation on June 30 resulted in a 5 per cent decline in its portfolio value and the group said it is well positioned for the future.

Harworth’s chief executive, Owen Michaelson, said: “Given our demonstrated financial and operational resilience and our long term confidence in our business model, we are returning to paying dividends with an interim dividend per share of 0.334p, a 10 per cent increase on our 2019 interim dividend.

“The group’s purpose of delivering sustainable places for people to live and work remains as relevant as ever to support the UK’s economic recovery.”

Kitty Patmore, chief financial officer, said the dividend is “absolutely reflective of our long term confidence in the business”.

Mr Michaelson said demand for residential and commercial land in the ‘beds and sheds’ sectors, which have demonstrated their resilience during this unprecedented period, remains strong in the North of England and Midlands.

When asked if he was worried that home working could become permanent after the Covid-19 crisis, he said: “No, not at all. There is talk among housebuilders about how to adapt future houses to accommodate more home working, so more home offices.

”We’ve got absolutely the type of housing that people want in order to get out of city centres. We’ve got lots of open space and lots of lovely parks associated with all our developments.

”We are building exactly the houses people want. They are exactly the price people want.”

It said the firm’s predominantly industrial portfolio has performed dependably with 95 per cent of income collected in the March and June quarters.

Mr Michaelson said: “Most of our tenants have been physically bolted down to the floor. Whether it’s manufacturing facilities or whether it’s modern distribution technology.

”The reason why they’ve carried on paying the rent is that they have got people coming into their buildings.

”We have the sort of tenants who have to maintain occupation to keep going. We have virtually no offices in our portfolio. It’s predominantly industrial and heavy distribution.”

He said that the group operates at the value end of the market.

“We do affordable homes and we tend to build in much more affordable areas,” he said.

“The Government has just increased its target as well to 337,000 new homes a year.”

The cheapest Harworth house at the Waverley flagship development in Rotherham costs £150,000 and the top price is just short of £400,000.

With over 70 per cent of all budgeted sales for 2020 completed or agreed, Harworth said it has financial headroom of £63m in place to take advantage of market opportunities.

The group made an operating loss of £3.7m in the six months to June 30, down from a profit of £13.3m in the previous half year. It said that profitable sales and strong rent collection helped to mitigate the downward property valuation movement.